Black Stone Minerals (BSM) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $92.7 million, up 49% from Q3 2023, driven by $31.7 million in commodity derivative gains despite lower oil and gas sales volumes and prices.

• Distribution was maintained at $0.375 per unit for Q3 2024, with a 1.00x coverage ratio and no debt outstanding.

• Strategic mineral and royalty acquisitions totaled $14.7–$15 million in Q3, with $79.8–$80 million acquired since Q4 2023, supporting long-term value creation.

• Amended joint exploration agreements with Aethon in East Texas extended program years and revised drilling schedules.

• Active grassroots acquisition program and asset exchanges expanded the asset footprint.

Financial highlights

• Mineral and royalty production averaged 35.3 thousand Boe per day; total production was 37.4 thousand Boe per day, both down from last quarter and year-over-year.

• Oil and gas revenue was $101.0 million, down 8% sequentially and 25% year-over-year; average realized price per Boe was $29.40.

• Adjusted EBITDA for Q3 2024 was $86.4 million, down from $130.0 million in Q3 2023; distributable cash flow was $78.6 million.

• Lease operating expense decreased 7.4% to $2.4 million; production costs and ad valorem taxes fell 24.8% to $12.4 million.

• Cash balance was $21.0 million as of September 30 and $42.8 million as of November 1, 2024.

Outlook and guidance

• Management continues to focus on organic growth, targeted mineral acquisitions, and long-term development opportunities, especially in the Gulf Coast region.

• Hedge positions in place for oil and gas through 2026, with 2024 gas hedges at $3.55 per MMBtu and oil swaps averaging $71.22/Bbl in 2025.

• Distribution policy remains stable, with ongoing review of market dynamics and expectation of improved natural gas conditions.